Correlation Between In8bio and Blue Star

Can any of the company-specific risk be diversified away by investing in both In8bio and Blue Star at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining In8bio and Blue Star into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between In8bio Inc and Blue Star Foods, you can compare the effects of market volatilities on In8bio and Blue Star and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in In8bio with a short position of Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of In8bio and Blue Star.

Diversification Opportunities for In8bio and Blue Star

-0.3

Correlation Coefficient

In8bio  Blue Star

Very good diversification

The 3 months correlation between In8bio and Blue is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding In8bio Inc and Blue Star Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Foods and In8bio is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on In8bio Inc are associated (or correlated) with Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Foods has no effect on the direction of In8bio i.e., In8bio and Blue Star go up and down completely randomly.

Pair Corralation between In8bio and Blue Star

Given the investment horizon of 90 days In8bio Inc is expected to generate 0.36 times more return on investment than Blue Star. However, In8bio Inc is 2.78 times less risky than Blue Star. It trades about 0.04 of its potential returns per unit of risk. Blue Star Foods is currently generating about -0.15 per unit of risk. If you would invest  31.00  in In8bio Inc on October 11, 2024 and sell it today you would earn a total of  0.00  from holding In8bio Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.0%
Values	Daily Returns

In8bio Inc  vs.  Blue Star Foods

In8bio Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in In8bio Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, In8bio sustained solid returns over the last few months and may actually be approaching a breakup point.

Blue Star Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Star Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with In8bio and Blue Star

The main advantage of trading using opposite In8bio and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if In8bio position performs unexpectedly, Blue Star can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blue Star will offset losses from the drop in Blue Star's long position.

The idea behind In8bio Inc and Blue Star Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.